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HomeMy WebLinkAboutOrdinance 627ORDINANCE 627 ORDINANCE OF THE CITY COUNCIL OF THE TOWN OF LOS ALTOS HILLS AMENDING TITLE 10 (ZONING AND SITE DEVELOPMENT) OF THE LOS ALTOS HILLS MUNICIPAL CODE TO ADOPT A DENSITY BONUS ORDINANCE IMPLEMENTING STATE LAW CONSISTENT WITH HOUSING ELEMENT WHEREAS, California Housing Element Law (Gov. Code §65580 et seq.) requires housing elements to assess housing needs, identify inventory of resources, and analyze potential constraints relevant to meeting a jurisdiction's Regional Housing Need Allocation (RHNA) obligation and for preserving, improving, and developing housing. This includes an analysis of potential and actual governmental constraints upon the maintenance, improvement, or development of housing for all income levels, and inclusion of goals, programs and policies to promote and incentivize housing opportunities; and WHEREAS, Government Code sections 65915 — 65918 ("State Density Bonus Law") allows housing development applicants to seek density bonuses for housing developments or land donations within a local jurisdiction by setting aside project units as affordable housing; and WHEREAS, State Density Bonus Law requires cities to adopt an ordinance to specify how compliance with the statutory density bonus requirements will be implemented; and WHEREAS, the adopted and state -certified 2023-2031 Housing Element ("Housing Element") of the Town of Los Altos Hills ("Town") contains numerous goals, policies and programs to meet its RHNA obligations, including an inventory of sites in the Town suitable to accommodate housing units at various income levels under RHNA, programs to rezone such sites to multi -family zoning districts to accommodate RHNA units and to ensure that parcels would be developed at appropriate minimum densities, and to streamline residential development projects and promote housing opportunities and mobility; and WHEREAS, Policy 2.6 under Goal 2 of the Housing Element provides for incentivizing development of affordable housing through density bonuses. Program B-3 of the Housing Element provides for the Town to amend its Zoning Ordinance to update density bonus regulations to meet updated state Density Bonus Law requirements, including amendments introduced by Assembly Bill (AB) 2345, Senate Bill (SB) 1763, and SB 1227; and WHEREAS, the Town has prepared this Ordinance amending Title 10 of the Los Altos Hills Municipal Code to adopt a Density Bonus Ordinance that implements State Density Bonus Law (the "Ordinance"), consistent with the Housing Element and State Density Bonus Law; and WHEREAS, under the California Environmental Quality Act ("CEQA"), CEQA only applies to projects which have the potential for causing a significant effect on the environment. CEQA Guidelines section 15061(b)(3) provides that CEQA does not apply to activities that would not have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity In question may have a significant effect on the environment, the activity is not subject to CEQA; and WHEREAS, on May 17, 2026, the Los Altos Hills Planning Commission held a public hearing to consider a recommendation to the Los Altos Hills City Council regarding the proposed Ordinance. At the public hearing, the Planning Commission reviewed and carefully considered all testimony, comments, and evidence presented in the record and during the hearing; and ORDINANCE 627 11 P 1-1 WHEREAS, at its May 17, 2026, meeting, the Planning Commission by Resolution PC26-14 recommended the City Council adopt the Ordinance; and WHEREAS, on June 18, 2026, the Los Altos Hills City Council held a public hearing to consider proposed Ordinance and the Planning Commission recommendation. At the public hearing, the City Council reviewed and carefully considered the proposed Ordinance, and all related testimony and evidence presented in the record and during the hearing. All interested parties were provided with an opportunity to participate and be heard. NOW, THEREFORE, the City Council of the Town of Los Altos Hills does hereby ordain as follows: SECTION I. FINDINGS. Based on the entirety of the record before it, which includes, without limitation, the California Environmental Quality Act, Public Resources Code §21000, et seq. and the CEQA Guidelines, 14 California Code of Regulations § 15000, et seq. (collectively, "CEQA"); the Los Altos Hills General Plan and Housing Element; the Los Altos Hills Municipal Code; all reports, minutes, and public testimony submitted as part of the Planning Commission's May 17, 2026, public hearing and the City Council's June 18, 2026, public hearing, any and all other evidence (within the meaning of Public Resources Code §21080(e) and §21082.2), the City Council of the Town of Los Altos Hills hereby finds as follows: 1. All recitals above are true, correct, incorporated herein and made a part hereof. 2. The documents and other material constituting the record for these proceedings are located at the Community Development Department for the Town of Los Altos Hills, 26379 Fremont Road, Los Altos Hills, and in the custody of the Community Development Director. 3. This Ordinance is exempt from CEQA pursuant CEQA Guidelines section 15061(b)(3) as CEQA only applies to projects which have the potential for causing a significant effect on the environment. where it can be seen with certainty that there. is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. This Ordinance establishes a procedure for implementing State Density Bonus Law as required by statute and the Housing Element. However, it does not approve any projects, grant any entitlements, or make physical changes to the environment. As such, this Ordinance is a regulatory act taken by the Town and does not physically change the environment. Therefore, it is exempt from CEQA as it does not have the potential for causing a significant effect on the environment. 4. This Ordinance was prepared and adopted in accordance with the Planning and Zoning Law (Government Code, sections 65853-65860) and meets all of the requirements thereunder. 5. This Ordinance is consistent with and supports the General Plan by implementing housing goals, programs and strategies in the Housing Element, including but not limited to Program B- 3. This Ordinance is consistent with Program B-3, and supports the Town's goals, policies and programs to incentivize housing, promote affordability, and reduce potential constraints. It also allows the Town to comply with relevant state housing laws. ORDINANCE 627 2 1 P ,3e 4n, SECTION II. AMENDMENT. 1. Amendments to Article 2 "Definitions" of Chapter 1 "Zoning" of Title 10 "Zoning and Site Development" of the Municipal Code. The following definitions are hereby added to Article 2 "Definitions" of Chapter 1 "Zoning" of Title 10 "Zoning and Site Development" of the Municipal Code and shall be incorporated in alphabetical order to existing definitions. Other definitions under Article 2 are not amended and shall continue in full force and effect. Density Bonus An increase over the otherwise maximum allowable residential density under the Town's Zoning Ordinance, any applicable specific plan as may be adopted by the City Council, or the Land Use Element of the General Plan, as in effect on the date the application is submitted to the Town, as defined in Government Code Section 65915(g). "Density bonus" includes both a density bonus and any additional density bonus as provided in the State Density Bonus Law. Density Bonus Housing Agreement A legally binding agreement between the developer of a housing development and the Town that ensures the requirements of the State Density Bonus Law and the Density Bonus Ordinance are satisfied. State Density Bonus Law Sections 65915 through 65918 of the California Government Code, or successor provisions, as such law may change from time to time. Non -Restricted Unit Any dwelling unit within a housing development excluding restricted units. Restricted Unit A dwelling unit that will be offered for rent or sale exclusively to and which shall be affordable to the designated income group or qualified resident, as required by Article 10 of Part III of Chapter 2 of this title and the State Density Bonus Law. 2. Additions to Title 10 "Zoning and Site Development" of the Municipal Code. A new Article 17, "Density Bonus Ordinance" is hereby added to Title 10 of the Municipal Code to read as follows. Other chapters, articles, sections, subsections, paragraphs and texts in Title 10 are not amended and shall continue in full force and effect. ARTICLE 17 DENSITY BONUS ORDINANCE § 10-1.1701 Purpose and Intent § 10-1.1702 Density Bonus Entitlement and Incentives § 10-1.1703 Waiver and Reduction of Development Standards § 10-1.1704 Density Bonus for Child Care Facilities § 10-1.1705 Revised Parking Standards § 10-1.1706 Affordability Requirements § 10-1.1707 Development Standards and Limitations § 10-1.1708 Density Bonus Application Procedure ORDINANCE 627 3 1 P 4, e § 10-1.1709 Town Review of Density Bonus Application § 10-1.1710 Density Bonus Housing Agreement § 10-1.1711 Restricted Units Occupancy and Management § 10- 1. 1712 Severability § 10-1.1701 Purpose and Intent; Title. The purpose of this article is to provide incentives for the production of housing for extremely low income, very low income, low income, and moderate -income households, senior citizens, transitional foster youth, disabled veterans, homeless persons, and low-income college students, in accordance with Government Code Sections 65915 through 65918 (State Density Bonus Law). In enacting this article, the Town's intent is to facilitate the development of affordable housing and to implement the goals, policies, and actions of the Housing Element of the Town's General Plan. This article shall be known and cited as the "Density Bonus Ordinance of the Town of Los Altos Hills" or "Density Bonus Ordinance." § 10-1.1702 Density Bonus Entitlement and Incentives. (a) The Town shall grant a density bonus and one or more incentives or concessions to any housing development consisting of five (5) or more dwelling units, as and to the extent required pursuant to Section 65915 of the State Density Bonus Law. (b) The Town shall grant a density bonus or other incentives of equivalent financial value to applicants for approval to convert apartments to a condominium project, as and to the extent required pursuant to Section 65915.5 of the State Density Bonus Law. (c) with the exception of the additional density bonuses for a land donation, childcare facility and qualifying affordable housing projects, as provided in this article or under the State Density Bonus Law, ' each housing development shall be entitled to only one (1) density bonus. (d) Any dwelling unit that would otherwise qualify and required to be maintained as a restricted unit pursuant to the Town's Inclusionary Housing Ordinance shall also be considered a restricted unit for purposes of determining whether the housing development qualifies for a density bonus. (e) Any density bonus or incentive or concession awarded pursuant to this article shall generally apply only to the particular housing development for which the density bonus or incentive or concession is awarded. A density bonus or incentive or concession may be transferred, credited, or applied to a different housing development only if the Town and the developer agree pursuant to an approved density bonus housing agreement. (f) The approval of a density bonus shall not, in and. of itself, preclude a housing development from receiving other government subsidies for affordable housing. (g) The approval of a density bonus, incentive or concession, development standard waiver or modification, or parking modification as provided herein, shall not be interpreted, in and of itself, to require a general plan amendment, zoning change, or other discretionary approval. (h) Bonuses above or below those available under state law. i. A developer may seek approval of a conditional use permit for additional bonus units that exceed the maximum density bonus available under the State Density Bonus Law, subj ect ORDINANCE 627 4 1 P to approval by the Town pursuant to Article 10, Chapter I of this title. If the Town grants and the developer accepts such additional bonus units, the additional bonus units shall be considered an incentive or concession. 11. If a developer agrees to construct a housing development that will contain less than the percentage of affordable units required to qualify for a density bonus pursuant to the State Density Bonus Law, the developer may seek approval of a conditional use pen -nit for a density bonus that is proportionally lower than the minimum density bonus specified in the State Density Bonus Law, subject to approval by the Town pursuant to Article 10, Chapter I of this title.' iii. If the Town grants and the developer accepts such additional bonus units pursuant to (i) or (ii) above, the additional bonus units shall be considered an incentive or concession. § 10-1.1703 Waiver and Reduction of Development Standards. A developer may seek a waiver or reduction of development standards that will have the effect of physically precluding the construction of a housing development that qualifies for a density bonus at the densities or with the incentives or concessions permitted by this article, as and to the extent required pursuant to Section 65915 of the State Density Bonus Law. The developer must make such request in writing. If the Town determines that the requested waiver or reduction does not meet the criteria under Section 65915 of the State Density Bonus Law, and upon the request of a developer, the Town shall meet with the developer to discuss such deficiencies and compliance with said criteria in a requested waiver or reduction of Town development standards. Notwithstanding the foregoing, the Town shall not be required to approve any request for a waiver or modification of development standards as permitted by Section 65915 of the State Density Bonus Law. §.10-1.1704 Density Bonus for Child Care Facilities. When a developer proposes to construct a housing development that qualifies for a density bonus under Section 10-1.1702 and the qualifying housing development includes a child care facility that will be located on the premises of, as part of, or immediately adjacent to, the housing development, and the housing development otherwise meets the requirements under subdivisions (b) and (h) of Section 65915 of the State Density Bonus Law, the Town shall grant an additional density bonus and concession or incentive as provided under subdivision (h) of Section 65915 of the State Density Bonus Law and subject to the requirements therein. § 10-1.1705 Revised Parking Standards. Upon the written request of the developer of a housing development that qualifies for a density bonus under Section 10-1.1702, the Town shall permit vehicle parking ratios, inclusive of handicapped and guest parking, which do not exceed the parking ratios established pursuant to Section 65915(p) of the State Density Bonus Law. § 10-1.1706 Affordability Requirements. All restricted units shall remain affordable in accordance with the requirements of, and for the minimum period required by, the State Density Bonus Law. The required affordability time limit for each restricted unit shall commence upon the issuance of a certificate of occupancy for such restricted unit. The owner of rental restricted units shall provide all notices and rights to tenants required to be given prior to and upon the expiration of affordability covenants pursuant to Government Code Section 65 863. 10 or successor statutes. ORDINANCE 627 5 1 P Z-1 § 10-1.1707 Development Standards and Limitations. (a) All housing developments subject to this article must satisfy all of the requirements of this article, notwithstanding the housing development's satisfaction of other program requirements, laws or regulations, including but not limited to the Town's Inclusionary Housing ordinance. Those restricted units provided under this article which meet all of the requirements for inclusionary units in the Town's Inclusionary Housing Ordinance shall also qualify as inclusionary units for purposes of that ordinance. (b) Restricted units shall be constructed concurrently with non -restricted units as specified in the density bonus housing agreement, unless the Town and the developer otherwise agree pursuant to a schedule included in the density bonus housing agreement. (c) Unless the Town and developer otherwise agree pursuant to a density bonus housing agreement, restricted units: i. Shall be built on site; ii. Shall not be located in only one (1) portion of the housing development or be situated within only one (1) building of a housing development that contains multiple buildings; and iii. Shall be of the same size and interior finishes and features as the nonrestricted units. (d) Residents of restricted units shall be entitled to use all of the same amenities within the housing development. The number of bedrooms of the restricted units shall be proportional to the number of bedrooms in the non -restricted units of the housing development. The exterior appearance of the restricted units shall be of the sante design and appearance as the overall housing development by having the same building form (proportion of width to length and plate height with a variation of up to twenty-five percent (25%)), exterior construction materials, roof form, siding and trim, and window placement and type. Housing developments shall comply with all applicable development standards, except those that may be modified as provided by this article. In addition, all units in housing developments subject to this article must comply with all applicable California Building Standards Codes incorporated and as may be amended under Title 8 of this code, including but not limited to residential and fire code requirements. (e) Density bonus units may be located in geographic areas of the development site other than the areas where the restricted units are located and shall be located only on parcels for which the density bonus was granted except as permitted pursuant to Section 10-1.1702. (f) No building permit shall be issued, nor any development approval granted, for any improvements within a housing development subject to this article which do not meet the requirements of this article. No restricted unit shall be rented or sold except in accordance with this article. (g) The entry into and execution of a density bonus housing agreement shall be a condition of any application for a discretionary land use permit, including but not limited to subdivision maps, site plans, and conditional use permits, for a housing development proposed under this article. ORDINANCE 627 6 1 Pa g e § 10-1.1708 Density Bonus Application Procedure. (a) An application for a density bonus, incentive, concession, waiver, modification, or revised parking standard pursuant to the density bonus ordinance shall, to the extent possible, be submitted with the first application for approval of a housing development, including a preliminary application submitted pursuant to Government Code Section 65941.1, and processed concurrently with all other applications required for the housing development. If any requested incentive, concession, waiver, modification, or revised parking standard requires a separate land use application, including but not limited to a variance or conditional use permit, the separate land use application shall, to the extent possible, be submitted with the housing development application for concurrent processing. (b) The Community Development Director or his or her designee shall prepare and maintain a list of supplemental application materials for density bonus, incentive, concession, waiver, modification, or revised parking standard requests under this article, which materials shall be submitted together with and as part of the project application. (c) The application shall be submitted on a form prescribed by the Town and shall include at least the following information: i. Site plan showing total number of dwelling units, including the number and location of non -restricted units, the number and location of restricted units, and the number and location of proposed density bonus units. ii. Level of affordability of restricted units and plans for ensuring affordability. iii. Description of any requested incentive, concession, waiver or modifications of development standards, or 'modified parking standards. For any incentive and concession, the application shall include evidence that the requested incentive and concession results in identifiable and actual cost reductions. For waivers or modifications of development standards, the application shall show that the development standards will have the effect of physically precluding the construction of a housing development that qualifies for a density bonus at the densities or with the incentives or concessions permitted by this density bonus ordinance. iv. If a density bonus is requested for a donation of land, the application shall show the location of the land to be dedicated and provide evidence that all of the conditions required by Section 65915 of the State Density Bonus Law for donations of land are satisfied. V. If a density bonus or incentive or concession is requested for a childcare facility, the application shall show the location and square footage of the childcare facility and provide evidence that each finding included in Section 10-1.1704 can be made. § 10-1.1709 Town Review of Density- Bonus Application. (a) Upon submittal of an application for a density bonus, incentive, concession, waiver, modification, or revised parking standard, the Community Development Director or his or her designee shall determine if the application is complete and conforms to the provisions of this article. (b) An application for a density bonus, incentive, concession, waiver, modification, or revised parking standard pursuant to the density bonus ordinance shall be considered by and acted ORDINANCE 627 7 1 P3 � e upon by the approval body with authority to approve the housing development. Any decision regarding a density bonus, incentive, concession, waiver, modification, or revised parking standard may be appealed to the Planning Commission and from the Planning Commission to the City Council. (c) Public hearings shall be held pursuant to Section 10-1.1005 for any density bonus, incentive, concession, waiver, modification, or revised parking standard applied for under the provisions of this density bonus ordinance. Density bonuses and related incentives, concessions, reductions and waivers shall be approved by the highest approval body required to review and approve the requested application. Other reviewing bodies in advisory roles may provide comments and recommendations to the approving body. § 10-1.1710 Density Bonus Dousing Agreement. (a) Any developer receiving a density bonus, incentives and concessions, waivers or modifications of development standards, or reduced parking requirements pursuant to this article shall agree to enter into a density bonus housing agreement with the Town to ensure compliance with this article and the State Density Bonus Law, including that restricted units remain restricted and affordable in accordance with State Density Bonus Law requirements. The density bonus housing agreement shall be submitted to the Town by the developer, shall be made a condition of the discretionary planning permits for all housing developments pursuant to this article, and shall be recorded as a deed restriction on any parcels on which the restricted units will be constructed. Where an inclusionary housing agreement is required pursuant to the Town's Inclusionary Housing Ordinance, both the density bonus housing agreement and inclusionary housing agreement shall, if feasible, be combined into a single agreement. (b) The density bonus housing agreement shall be recorded prior to the approval of any parcel map or final map or, where the housing development does not include a map, prior to issuance of a building permit for any structure in the housing development. The density bonus housing agreement shall run with the land and be binding upon all future owners and successors in interest. (c) The density bonus housing agreement shall include, but not be limited to, the following terms: i. The total number of units including restricted units approved for the housing development, the number of density bonus units granted, and the number, type, location, unit size (square footage), number of bedrooms, tenure of restrictions and affordability, and level of affordability of restricted units. ii. Standards for determining affordable rent or affordable ownership cost for the restricted units. iii. A schedule for completion and occupancy of restricted units in relation to construction of non -restricted units. iv. A description of any incentive, concession, waiver, modification, or revised parking standard being provided by the Town. V. Provisions to ensure affordability of the restricted units, including but not limited to, and where applicable, tenure and conditions governing the initial sale of for -sale restricted units. ORDINANCE 627 8 1CF vi. Where applicable, tenure and conditions establishing rules and procedures for qualifying tenants and prospective purchasers, setting rental rates, filling vacancies, and operating and maintaining units for rental restricted units. vii. A description of remedies for breach of the agreement by either party. The Town may identify tenants or qualified purchasers as third -party beneficiaries under the agreement. viii. Other provisions to ensure implementation and compliance with this article and the State Density Bonus Law. § 10-1.1711 Restricted Units Occupancy and Management. (a) Density Bonus Resale Agreement. All buyers of for -sale restricted units shall enter into a density bonus resale agreement with the Town prior to purchasing the unit or property. The resale agreement shall be consistent with the density bonus housing agreement. (b) Eligibility Requirements. Only households meeting eligibility standards for the restricted units as set forth in the density bonus housing agreement shall be eligible to occupy restricted units. (c) Management and Monitoring. Rental restricted units shall be managed and operated by the owner or his or her agent. Each owner of rental restricted units shall submit an annual report to the Town in the form prescribed by the Town, identifying which units are restricted units, the monthly rent, vacancy information for each rental target dwelling unit for the prior year, monthly income for tenants of each rental target dwelling unit, and other information as required by the Town, while ensuring the privacy of the tenant. § 10-1.1712 Severability. If any provision of this article or the application thereof to any person or circumstances is held invalid, the remainder of the article and the application of the provision to other persons not similarly situated or to other circumstances shall not be affected thereby. In the event of any conflict between this article and the State Density Bonus Law, the State Density Bonus Law shall prevail. If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid or unconstitutional the remainder of this Ordinance, including the application of such part or provision to other persons or circumstances shall not be affected thereby and shall continue in full force and effect. To this end, provisions of this Ordinance are severable. The City Council of the Town of Los Altos Hills hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase hereof irrespective of the fact that any one or more sections, subsections, subdivisions, paragraphs, sentences, clauses, or phrases be held unconstitutional, invalid, or unenforceable. I W,X jlli, J Pursuant to the provisions of Government Code Section 36933, a summary of this Ordinance shall be prepared by the City Attorney. At least five (5) days prior to the Council meeting at which this Ordinance is scheduled to be adopted, the City Clerk shall (1) publish the Summary, and (2) post in the City Clerk's Office a certified copy of this Ordinance. Within fifteen (15) days after the adoption of this Ordinance, the City Clerk shall (1) publish the summary, and (2) post in the City Clerk's Office a certified copy of the full text of this Ordinance along with the names of those City Council members voting for and ORDINANCE 627 9 1 P ,3 t:� CT e against this Ordinance or otherwise voting. This Ordinance shall become effective thirty (30) days from and after its adoption. INTRODUCED: JUNE 18, 2026 PASSED: AUGUST 20, 2026 AYES: BHATEJA, TYSON, MOK, SWAN NOES: NONE ABSTAIN: NONE ABSENT: TANKHA ATTEST: Arika Birdsong -Miller, City Clerk BY: A- /V Rajiv Bhateja, Mayor ORDINANCE 627 10 1 P a g